270° View

D3/Harris Poll Survey reveals preference for regional and community FIs, but digital remains an obstacle

Editor's note: In this week’s blog, we share the main takeaways from our recent survey conducted online by The Harris Poll on D3’s behalf.

It’s no secret that the customers and members of banks and credit unions desire stellar service from their institutions, and this caliber of service is more important than ever before. According to the results of a recent survey of over 2,000 U.S. adults conducted online by The Harris Poll on behalf of D3, 74% of Americans are likely to recommend their financial institution to someone they know well, such as a family member or colleague. The most common reason for recommending their financial institution is good customer service (82%).

The survey results also demonstrated that size does matter. Nearly three in five Americans (58%) would rather bank with a local/regional financial institution over a national one, according to the survey. The top reason cited for this preference is better customer service (59%) – is there an echo in the room or have we heard that before? While these numbers indicate local/regional institutions have appeal to consumers, there is some “other news.” Of the consumers that prefer to bank with a national institution over local/regional, 42% said it’s because they offer a better digital banking experience.

To make the picture as clear as possible, the vulnerability for local/regional players is digital. While branches are still plentiful, the decline in their numbers is well documented. Customers and members, in general, have made digital their branch in increasing numbers, and few believe this trend will degrade in the foreseeable future.

The challenge for the banks and credit unions who must (and can) compete against the largest institutions is how to convert a high level of customer service delivered in other channels into a digital experience. Institutions with digital offerings expressed via mediocre apps and/or websites will continue to struggle to build the in-depth relationships with consumers that they desire. In addition to ensuring the digital experience is seamless, institutions must expand the offerings that are available in their digital environments. More than three in five Americans (61%) want their financial institution to anticipate their financial needs the same way online retailers do. Tech giants and emerging fintechs may seem to have the advantage in anticipating consumer needs, but in reality, more than three-fourths of Americans (78%) would feel more comfortable with their financial institution having access to their personal data over a large technology company. This is good news as it opens up the possibility of using that data to deliver the personalized service consumers want.

Even though these survey results still seem to indicate that it is community and regional FIs’ game to lose; these institutions cannot just play defense when it comes to digital. The members of this segment of the market also must avoid the “we cannot win” mentality that is too often an excuse for a lack of strategic focus and investment in their digital channels. In fact, technology has reached a level in sophistication and economics that make it possible for an institution outside the too big to fail set to not just compete with anyone, but to also win that competition.

The Consumer Bankers Association will be hosting a webinar that features three industry veterans to discuss the specific implications of the Harris survey findings. The webinar will be broadcasted on Tuesday, Oct. 30 at 11:30 ET. Register here.

Survey Method: The survey was conducted online within the United States by The Harris Poll on behalf of D3 Banking Technology from September 13-17, 2018 among 2,006 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Amber Bush at amber@williammills.com.